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Volume 2, Issue 117: Friday, October 13, 2000
- "'David' Taking Aim at Chip Goliath Intel"
Investor's Business Daily (10/13/00) P. A6; DeTar, James
Chipmaker Transmeta has generated a great deal of industry buzz as it prepares for its Nasdaq IPO later this month. The company is touting its Crusoe microprocessor, which it says reduces power consumption in portable and handheld computers. Already, Hitachi, IBM, and others are planning Crusoe-based devices, and Sony will release the Vaio laptop, which runs on the Crusoe chip, at the end of October. Moreover, Transmeta is talking to Advanced Micro Devices about some kind of partnership, a sign that Transmeta may be ready to escalate its campaign against leading chipmaker Intel. Transmeta's Crusoe chip features new software that controls power consumption automatically. This results in 30 percent less power consumption than other chips, says Transmeta founder and CEO David Ditzel. Intel has already reacted to Transmeta's new chip, trumpeting the portable-based version of its Pentium III processor, but that chip requires users to control power consumption manually. Some analysts believe differences such as that have given Transmeta an edge over Intel in the market for portable chips. However, no one expects Transmeta to take on Intel in its dominant market, personal computers. "This isn't the first time someone came down the road and said: We can fight Intel with low power and low cost," said Semico Research analyst Tony Massimini. Intel has also announced it will release a chip next year that uses less than one watt of power, and the industry leader intends to move into the cell phone market, another area Transmeta has targeted.
- "Technology Briefing: Juniper Profit Tops Expectations"
New York Times (10/13/00) P. C5; Gaither, Chris
Juniper Networks revealed Thursday that its quarterly earnings beat Wall Street expectations amid analysts' assertions that the company is continuing to move in on Cisco Systems' dominance in the Internet-switching market. Juniper posted $58.1 million in net income, nearly twice as much as analysts had expected. The company posted a $1.59 million loss a year earlier. Sales surged 78 percent from the previous quarter to $201.2 million. A year earlier, the company reported $29.6 million in sales. Analysts had expected revenue of roughly $147 million. Juniper revised its annual revenue forecast to between $625 million and $640 million, compared to the initial forecast of $520 million.
- "Domain Names Hoarded, Suit Says"
Washington Post (10/13/00) P. E5; ElBoghdady, Dina
Online entrepreneur Stan Smith filed a class action lawsuit against Network Solutions alleging NSI broke the law by denying him 28 expired domain names that he had intended to leverage in order to expand his Internet computer-equipment business. NSI probably intends to auction off the held names, says Smith's lawyer, Scott Powell. The lawsuit could have helped spur the drop in VeriSign's stock value, as VeriSign, the parent company of NSI, was included as a defendant in the lawsuit, says J.P. Morgan analyst Raimundo C. Archibold Jr. However, Archibold met with VeriSign officials and determined that the lawsuit was of no consequence. VeriSign's reduced stock value could also be related to a First Call/Thomson Financial notice regarding a noticeable amount of domain name registration discounts or free registration promotions in this year's third quarter, says Archibold. Customers have had difficulties obtaining expired domain names from NSI, according to Register.com. ICANN does not have an expired domain name auctioning policy and did not comment on the lawsuit. "But ICANN is watching this [issue] very closely to determine if any policies are necessary," says ICANN CPO Andrew McLaughlin.
- "Government E-Ventures Hit as Rivals to Business"
Washington Post (10/13/00) P. A37; Suplee, Curt
The federal government's push into e-commerce may put it at odds with private enterprise, according to a new report. The Computer and Communications Industry Association commissioned "The Role of Government in a Digital Age" amid fears that online services could make the government a "publicly funded market competitor." Services targeted by the report include the U.S. Postal Service's eBillPay online bill payment program and an IRS plan, still under consideration, to provide online tax-preparation services. Rep. Robert W. Goodlatte (R-Va.), who supported the report's findings, said such services were unfair to private businesses and noted that the Postal Service "pays no taxes and doesn't have to worry about the threat of bankruptcy." An IRS tax-preparation service would create a tremendous conflict of interest, one of the report's authors said. The report found a few examples of appropriate government e-commerce, including the Department of Labor's online job listings service, and set out criteria for how government should enact e-commerce. Agencies should seek to make themselves more efficient and to provide data and information to the public but should not provide value-added services or compete directly with private-sector firms. The report was also highly critical of branches of the federal government with no presence on the Internet. The Supreme Court, for example, did not have a Web site until April of this year, the report noted.
- "B2B Is Long on Promise, But Still Short on Results"
Investor's Business Daily (10/12/00) P. A6; Coleman, Murray
The software promised from highly valued business-to-business (B2B) e-commerce firms such as Commerce One and Ariba may still be one or two quarters away from deployment, Jefferies & Co. analyst Richard Williams reports. That delay is not great, but because these stocks are trading at 20 to 50 times their expected revenue for next year, Williams says, "any little blip in delivery is huge because their shares are priced to perfection." Overall, B2B stocks suffered this year as investors failed to see the revenue and profit margins they expected, and market observers are anxiously awaiting third-quarter reports from B2B firms. Already, the Delphi Top 50 B2B Index has fallen 85 percent in 2000, and even Commerce One, expected to announce revenue gains of 38 percent for the third quarter, has lost 20 percent of its stock value. However, analysts say Commerce One remains in a strong position compared to most B2B firms because it offers technology and services rather than simply providing a forum for companies to buy and sell. Investors have soured on those firms after watching the performance of such companies as Ventro, which owns the Chemdex life-sciences B2B site. Ventro's profit margins have barely topped 5 percent this year, but analysts believe it could increase that to nearly 50 percent if it would expand into consulting and technology. Analysts conclude that although industry leaders such as Commerce One and Ariba remain strong investments, much of the market has been overvalued and is now receiving a long expected reality check.
- "Silicon Valley Faces Growing Competition"
Emerging "Internet clusters" could draw away Silicon Valley's high-tech leaders and eventually topple the valley's high-tech dominance, says a study released yesterday by management consulting firm A.T. Kearney and commissioned by Joint Venture: Silicon Valley Network. Issues such as traffic, the labor shortage, and the high cost of living caused up to 30 percent of the Internet companies in Silicon Valley to say they would consider relocating, the study says. Local governments in Silicon Valley need to focus on implementing growth initiatives that will improve the situation for companies as well as citizens, says A.T. Kearney's Ben Smith. Governments need to work on solving some of the problems that accompany rapid economic growth, according to 63 percent of the Internet executives who responded to the survey. Areas outside of the U.S. are becoming more appealing headquarters for Internet companies, as non-U.S. governments create technology parks, implement workforce development programs, simplify tax laws, and offer investment incentives. Still, the most popular areas cited for relocating were Austin, Texas; the Pacific Northwest; and the Washington, D.C., area.
- "French Legislators Urge Defense Against U.S. Internet Snooping"
Associated Press (10/11/00)
France must take steps to guard against the U.S. government's Echelon electronic spy network, which is a threat to all forms of communications, including email, states an 80-page report from the French National Assembly's defense commission. Echelon intercepts 180 million transmissions an hour and is a particularly serious threat to European businesses, French legislators said. Earlier this year, top U.S. intelligence officials testified before the House intelligence committee and denied that the U.S. is using a spy network to monitor Europeans.
- "Hacker Changes Newspaper Web Site"
USA Today (10/12/00) P. 3A; Oliveri, Frank
A hacker recently admitted to changing an online Orange County Register story about a another hacker who was arrested for breaking into a NASA computer. The story was changed to read that Microsoft Chairman Bill Gates was arrested for the break-in, although it was actually Jason Diekman who was arrested for the crime.
- "IBM Exec: Moore's Law to Hold for at Least 10 Years"
Dow Jones News (10/11/00); Okimoto, Jolyn
Microchip development will continue to march forward, resulting in ever smaller, cheaper processors, said IBM vice chairman John Thompson, noting that University of Massachusetts engineers have already developed an experimental Web server the size of a match head. However, despite the shrinking size, Thompson said Moore's Law, which holds that microchips' storage capacity doubles every 18 months, will remain true for the next 10 years. Speaking at Intel's eXCHANGE event in San Francisco, Thompson said the combination of advancements in chip design and data storage capabilities means that e-businesses will be free to develop business processes unencumbered by technology limitations.
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- "European Web Suffix Close to Approval"
Associated Press (10/11/00); Jesdanun, Anick
Although ICANN has tentatively agreed to accept the .eu top level domain for the European Union, final approval will not take place until contractual particulars have been completed with the European entities that will assign the .eu names, says ICANN CEO Mike Roberts. In order for ICANN to approve a regional code such as .eu, the country or territory would previously have been required to be on the International Organization for Standards' list, and the European Union is not on this list. However, the European Union is on a reserved list, and last month ICANN approved a resolution permitting country or territory codes that are on a reserved list. The new .eu suffix would provide European businesses with improved visibility, nurture European e-commerce, and assist in promoting European values and culture online.
For information regarding ACM's Internet governance work related to ICANN, visit http://www.acm.org/serving/IG.html.
- "Cutting the Web Down to Size"
New York Times (10/12/00) P. E1; Guernsey, Lisa
Traditional Web browsers and portals, which often force users to click through several layers of pages to access the information they want, may soon be a thing of the past. Several new companies now offer alternative Web tools that let users bypass unnecessary pages. One new service, DoDots, reduces Web pages to small windows that can appear all over a user's desktop, providing up-to-the-second weather, traffic, or sports information. Snippets and EntryPoint both replace the standard browser with a taskbar across the bottom of the screen. Services such as NeoPlanet and HotBar let users add personalized buttons to Netscape and Internet Explorer toolbars, giving them instant access to favorite sites. Several companies, including OnePage, ClickMarks, and Octopus, give users the tools to build their own Web portals. Many of these options are also appearing in the latest releases of established browsers such as Explorer and Netscape. The new companies believe their services will appeal to users' desire for speed and flexibility. However, observers question whether the new services are a good deal for users. First, many companies require users to submit detailed personal information, including email addresses, before they can download software. Second, the services provide a new way for hackers or others to breach the security of users' computers. Finally, many of these services compete with existing software, causing computers to slow or crash frequently. Analysts wonder if the personalized features of these new services are worth this trouble and risk.
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- "U.S. Internet Search Engines Click Abroad"
USA Today (10/09/00) P. 7B; Swartz, Jon
A large number of foreign Web users are utilizing American-based search engines, reports Media Metrix in a July study. Infoseek leads the market in Japan with 2.7 million unique visitors, while AltaVista dominates in Britain, Germany, France, Australia, and Canada with an average of 900,000 unique visitors a month. This is an especially good development for AltaVista and Infoseek, both of which had failed at earlier attempts to extend online services to shopping and news content. AltaVista in particular was losing money from its portal strategy, which the company abandoned to focus on searches. Longstanding operations and Babelfish language-translation software are responsible for AltaVista's international lead, claims CEO Rod Schrock. Fifty-five percent of AltaVista's annual Web traffic comes from outside the U.S., comprising 30 million to 40 million unique visitors on a monthly basis. Goto.com is one of the top five search engines in the British, German, French, Australian, and Canadian markets. In addition, Yahoo! and ExciteAtHome, portal companies that began as search engines, are also doing well abroad.
- "Tech Companies Are Upgrading Employees"
Washington Post (10/08/00) P. L3; Johnson, Carrie
Tech companies of all sizes, from industry giants such as Sun Microsystems to small startups, now provide their workers with free or low-cost training. Last year industry leaders spent $1,616 per worker in training costs, according to a report from the American Society for Training and Development. Such training is essential considering that any given programmer's knowledge can become obsolete in as little as a year, says training consultant Susan Boyd. Imtas CEO Ajay Bhatia says, "It's always cheaper to retrain the employee rather than going out and recruiting new ones." Firms have numerous training options from which to choose, although many now employ full-time trainers, the report found. For example, Digital Focus has created a "digital university" where workers can study everything from financial planning to Java programming. Some companies are also offering to subsidize courses taken at nearby universities or community colleges.
- "Hacking Rises Despite Increased Security Spending"
IDG News Service (10/05/00); Campbell, Christine M.
Increased security spending does not guarantee a more secure network, a recent study in Information Security magazine reported. The study found security spending by U.S. firms has risen 188 percent since 1998, while the number of attacks on corporate networks has also grown, with 80 percent of the firms surveyed reporting some kind of security breach. The most common external breaches came from worms, viruses, and Trojan horses. Other breaches included denial-of-service attacks, active program scripting, and buffer overflows. Information Security noted that firms with e-commerce systems were more likely to be targets of security breaches than those without. U.S. firms also saw a rise in internal security breaches last year, the report found. Unauthorized software installation was the most common violation, and firms also reported high rates of virus infection, illicit computer use, the use of computers for personal gain, and unauthorized hardware installation. The report warned firms to spend money wisely and recommended they use a layered defense and guard against carelessness among their employees. Consulting firms had the highest security spending, according to the report, with banking and finance companies a distant second. Colleges and universities had the lowest security spending.
For information regarding ACM's activities related to security, visit http://www.acm.org/usacm/crypto.
- "Extra Mega Browsers!"
Baltimore Sun (10/09/00) P. 1C; Katz, Frances
Several high-tech companies are counting on souped-up Web browsers to help them build a loyal audience like that of America Online. By incorporating everything from searching and news to email and software plug-ins into a Web browser, IT firms say they can keep Web surfers preoccupied much longer, which is what advertisers want to see. AOL has used the Web portal concept to integrate such services for Web users. Some 25 million AOL users simply go to the portal for all their online needs. The superbrowser category is populated with the likes of Microsoft, which unveiled its MSN Explorer browser last month. Currently available at the MSN Web site, the free Microsoft browser is a one-stop tool for Hotmail and MSN email accounts, local weather and links to all MSN properties, including Windows Media Player. Jupiter Communications analyst Lydia Loizides says Microsoft is "delivering a new kind of user interface and trying to make things as simple as possible for somebody coming fresh onto the Web who doesn't want to fuss with a whole lot of windows." Netscape has entered the superbrowser space with Netscape 6, which will have continuous and customized news updates and links to AOL's Instant Messenger software. Among the newcomers is Ultrabrowser, which plans to incorporate a search engine, directories, and TV and radio access into a customized space for the user. Even Yahoo! has entered the space, albeit with a toolbar that users can attach to their current Web browsers.
- "ICANN Can't Fulfill Need for Web Domain Diversity"
San Jose Mercury News Online (10/09/00); Gillmor, Dan
ICANN received 47 applications suggesting new top level domain names, some of which were obvious while others such as .per, .mas, .one, and .ypi were not so noticeably relevant. However, ICANN did not specify how many TLDs will be approved, and the Internet communities top guess is three. Three is much too low, writes columnist Dan Gillmor. "The new TLD applications illustrate how limited the current domain space is, and how rich it could be," says Consumer Project on Technology director Jamie Love. ICANN must allow for more choices as well as innovation among TLDs, says Love. ICANN claims it is keeping the number low for technical reasons and because some ICANN board members are concerned that the system would be deluged with domain name registrants of the new TLDs. Realistically, companies with strong trademarks want to avoid having too many new TLDs. The trademarked companies already acquired .com domains and it would be easier to keep an eye on trademark violations in an environment with limited TLDs. The dilemma will only be exacerbated as Internet users quickly obtain any new TLDs that might be valuable, concludes Gillmor.
For information regarding ACM's Internet governance work related to ICANN, visit http://www.acm.org/serving/IG.html.